STAFF at investment banking giant Goldman Sachs earned a mammoth $6.65bn (£4.1bn) in pay and bonuses during a bumper second quarter for the group.

Compensation and benefits were 47% higher, to reflect revenues soaring to a record $13.8bn (£8.5bn) as improving financial markets buoyed the business.

The bank, which has more than 5,000 staff in the UK, also delivered a 65% rise in second-quarter profits of $3.44bn (£2.1bn) – well above expectations.

Chief executive Lloyd Blankfein said: “While markets remain fragile and we recognise the challenges the broader economy faces, our second-quarter results reflected the combination of improving financial market conditions and a deep and diverse client franchise.”

Goldman Sachs took $10bn (£6.1bn) from the US Government’s bail-out funds at the height of the crisis last October, but repaid the cash in June.

Goldman's strong results underline its status as one of the strongest players on Wall Street and sent bank stocks higher in London.

Other major US banks are also due to report this week.

The bank posted a quarterly loss during the final quarter of 2008 in the worst stages of the crisis before returning to profitability in the first three months of 2009.

Goldman generated a record $6.8bn (£4.2bn) in revenues from fixed income, currency and commodities trading during the second quarter, with a strong performance in credit and interest rate products and currencies.